7887

• UCREFRP Catalog Number: 7887
• Author: Fischer, H., ‎(Wendy E. Hudson, ed.)‎.
• Title: Building Economic Incentives Into The Endangered Species Act, Third Edition.
• USFW Year: 1994.
• USFW - Doc Type: Washington, D.C.
• Copyright Material: NO

certain habitat and she wants to convert more than her 15 percent allocation, she
would have to buy the requisite development rights from other landowners. Such
development rights could be held and purchased by any interested party. Land-
owners creating new habitat would be eligible to market or exercise their develop-
ment rights on a 1:3 or 1:2 ratio (i.e., one unit of development rights per two or
three units of created habitat).
Rationale: Markets tend to work efficiently in determining resource allocations
because the best use of a scarce resource is matched with the greatest need, as
reflected in the price a party is willing to pay for the use of that resource. The
right to destroy or degrade important habitat is extraordinarily valuable. Creating
a market for these rights would allow their full economic value to be realized, and
could help ensure that a scarce and valuable resource would be used in society's
best interests. A market in habitat development rights could be plausible and
effective because such rights are a scarce and extremely valuable resource, and
the right, or amount of habitat to be traded, would be sharply defined by the FWS
during the initial allocation.
Precedent for this type of government action is widespread. The federal govern-
mentregularly defines quota levels during the HCP planning process -from the
amount of habitat that can be developed to the amount of clean air that can be
used up or dirtied, to the amount of various crops and commodities eligible for
price supports, to the amount of ocean-going fish that can be harvested. Trade-
able development and use rights are being used by the Environmental Protection
Agency in dirty air basins, by the Bureau of Reclamation for rights to federal
water, and by county governments to control housing density levels.
Benefits from a market in habitat development rights would be shared among
private landowners, overall biodiversity, and society in general:
• Private landowners would benefit from such a program because a
portion of their lands containing important habitat would be imbued with
financial value, rather than being a nuisance and a constraint.
• Development patterns would improve because the scarcity of develop-
ment rights would cause land to be used more efficiently. Nominally
profitable ventures causing habitat destruction would be rendered unprofit-
able.
• Perhaps most importantly, overall biodiversity would benefit because
the amount of habitat authorized to be destroyed would be clearly defined
and capped. The continual incremental losses of habitat currently sanc-
tioned by the FW S through less than obvious criteria would be halted.
Endangered species would also benefit because a powerful incentive to
create new habitat would be introduced.
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